US Stocks Edge Higher; PepsiCo Cuts 2024 Revenue Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 08 2024
0mins
Source: Benzinga
U.S. Stock Market Performance: U.S. stocks rose this morning, with the Nasdaq Composite gaining approximately 0.5%, while PepsiCo reported mixed third-quarter results and lowered its 2024 revenue guidance.
Global Market Trends: European shares mostly declined, Asian markets closed lower except for India's BSE Sensex, and the U.S. trade deficit shrank to its lowest level in five months.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy PEP?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on PEP
Wall Street analysts forecast PEP stock price to fall
12 Analyst Rating
6 Buy
6 Hold
0 Sell
Moderate Buy
Current: 167.200
Low
144.00
Averages
161.90
High
172.00
Current: 167.200
Low
144.00
Averages
161.90
High
172.00
About PEP
PepsiCo, Inc. is a global beverage and convenient food company. The Company’s segments include PepsiCo Foods North America (PFNA), PepsiCo Beverages North America (PBNA), International Beverages Franchise (IB Franchise), Europe, Middle East and Africa (EMEA), Latin America Foods (LatAm Foods), and Asia Pacific Foods. PFNA segment includes all of its convenient food businesses in the United States and Canada. PBNA segment includes all of its beverage businesses in the United States and Canada. IB Franchise segment includes its international franchise beverage businesses, as well as its SodaStream business. EMEA segment includes its convenient food businesses and beverage businesses with Company-owned bottlers in Europe, the Middle East and Africa. LatAm Foods segment includes all of its convenient food businesses in Latin America. Asia Pacific Foods segment consists of its convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Anthropic Leads AI Revolution, Software Industry Faces Challenges
- AI Disrupts Traditional Software: The rise of Anthropic poses significant challenges to traditional software companies like Workday and Salesforce, particularly in the application of AI technology, threatening their market share and customer loyalty.
- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
PepsiCo Extends Dividend Growth Streak to 54 Years
- Dividend Growth Continuation: PepsiCo (PEP) recently announced its dividend growth streak has reached 54 years, with the March dividend remaining the same as last quarter but up 5% from last year, while the June dividend will increase by 4%, demonstrating the company's strong cash flow and profitability.
- Strong Cash Flow: Last year, PepsiCo generated nearly $12.1 billion in operating cash flow, comfortably covering $4.4 billion in capital expenditures and $7.6 billion in dividend payments, reflecting its financial stability and supporting its A+ credit rating.
- Future Return Plans: PepsiCo anticipates paying $7.9 billion in dividends by 2026 and plans to repurchase $1 billion of its stock as part of a newly announced $10 billion repurchase program, further enhancing shareholder returns.
- Optimistic Growth Outlook: The company expects net revenue growth of 4% to 6% in 2026, with core earnings-per-share growth of 4% to 6%, and will continue investing in high-growth areas to ensure long-term revenue and earnings growth.
See More
PepsiCo Extends Dividend Growth Streak to 54 Years
- Dividend Increase: PepsiCo has announced a 4% increase in its dividend, marking its 54th consecutive year of dividend growth, which underscores the company's robust cash flow and profitability, solidifying its status as a Dividend King.
- Strong Cash Flow: Last year, PepsiCo generated nearly $12.1 billion in operating cash flow, comfortably covering $4.4 billion in capital expenditures and $7.6 billion in dividend payments, demonstrating its strong financial health and commitment to shareholder returns.
- Future Commitments: By 2026, PepsiCo anticipates paying $7.9 billion in dividends and plans to repurchase $1 billion of its stock as part of a newly announced $10 billion buyback program, reflecting the company's confidence in future growth and commitment to shareholders.
- Growth Strategy: PepsiCo expects to achieve net revenue growth of 4% to 6% by 2026 and plans to invest nearly 5% of its net revenue in high-growth areas to support ongoing growth and profitability, ensuring its ability to maintain future dividend payments.
See More
Coca-Cola and PepsiCo: Attractive Dividend Stocks
- Coca-Cola's Brand Strength: Coca-Cola stands out as a top dividend stock with a 63-year dividend growth streak and strong brand power, reporting a 1% year-over-year increase in unit case volume while adjusted revenue rose by 6% in Q3, showcasing its pricing power and market share gains.
- Stable Dividend Yield: The current quarterly dividend of $0.51, annualized to $2.04, yields 2.60%, and is expected to grow in line with earnings, which analysts project will increase at a 6% annualized rate over the long term, making it a solid income investment.
- PepsiCo's Growth Potential: With 60 consecutive years of dividend payments, PepsiCo benefits from a strong brand portfolio and global distribution network, achieving over 5% revenue growth despite macroeconomic challenges, alongside an 11% increase in adjusted earnings per share.
- Proactive Investment Strategy: PepsiCo plans to pay $5.92 in dividends per share over the next year, with a forward dividend yield of 3.52%, representing 69% of analysts' 2026 earnings estimates, providing an attractive proposition for income investors.
See More
Stable Dividend Growth Investment Opportunities
- American States Water Overview: American States Water (AWR) has paid dividends since 1931 and has raised them annually for 70 years, making it a Dividend King with a current yield of 2.7%, reflecting its strong financial health.
- T. Rowe Price Growth Potential: T. Rowe Price (TROW) manages $1.78 trillion in assets, offering a dividend yield of 5.3%, and has reduced its payout ratio from 71.6% to 55%, enhancing its appeal as a steady growth stock.
- PepsiCo's Risk and Reward: PepsiCo (PEP) paid $7.92 billion in dividends in 2025, with a payout ratio of 105%, yet its revenue grew by 5.6% in Q4, indicating future growth potential despite cash flow pressures from acquisitions.
- Diversifying Dividend Portfolio: By combining the stability of American States Water, the high yield of T. Rowe Price, and the growth potential of PepsiCo, investors can create a diversified dividend portfolio to mitigate risk and enhance returns.
See More
Starbucks and PepsiCo Present Dividend Investment Opportunities
- Starbucks Performance Recovery: After several challenging years, Starbucks is witnessing an uptick in transactions and average ticket size, driving a 4% year-over-year increase in global comparable store sales, indicating early success of its 'Back to Starbucks' plan.
- Dividend Growth Potential: With a quarterly dividend of $0.62 and an annualized dividend of $2.48, Starbucks is nearing its sustainable payout limit; however, under CEO Brian Niccol's turnaround strategy, further increases are anticipated as the business improves.
- PepsiCo's Steady Growth: Over the past five years, PepsiCo has achieved a 31% revenue increase and a 19% rise in free cash flow, with the latest free cash flow reaching $7.6 billion, demonstrating resilience amid high inflation and pandemic challenges.
- Future Dividend Increase: PepsiCo plans to raise its full-year dividend by 4% to $5.92 in 2026, with the current quarterly dividend at $1.4225 and an annualized dividend of $5.69, indicating a strong outlook for continued dividend growth.
See More
Anthropic Leads AI Revolution, Software Industry Faces Challenges
- AI Disrupts Traditional Software: The rise of Anthropic poses significant challenges to traditional software companies like Workday and Salesforce, particularly in the application of AI technology, threatening their market share and customer loyalty.
- Surge in Capital Expenditures: Tech giants like Amazon and Google have significantly raised their capital expenditure outlooks, with Amazon projecting spending to reach $200 billion, far exceeding the $147 billion consensus, which could impact stock performance and investor confidence.
- Intensified Market Competition: The rapid advancement of AI technology raises questions about the value of enterprise software, leading investors to adopt a pessimistic view on the future of traditional software companies, especially in labor-intensive areas that may face workforce reductions due to AI adoption.
- Investor Confidence Shaken: Despite significant advancements by companies like Anthropic and OpenAI in the AI space, market confidence in traditional software companies is waning, resulting in poor stock performance over the past six months and raising concerns about future profitability.
See More
PepsiCo Extends Dividend Growth Streak to 54 Years
- Dividend Growth Continuation: PepsiCo (PEP) recently announced its dividend growth streak has reached 54 years, with the March dividend remaining the same as last quarter but up 5% from last year, while the June dividend will increase by 4%, demonstrating the company's strong cash flow and profitability.
- Strong Cash Flow: Last year, PepsiCo generated nearly $12.1 billion in operating cash flow, comfortably covering $4.4 billion in capital expenditures and $7.6 billion in dividend payments, reflecting its financial stability and supporting its A+ credit rating.
- Future Return Plans: PepsiCo anticipates paying $7.9 billion in dividends by 2026 and plans to repurchase $1 billion of its stock as part of a newly announced $10 billion repurchase program, further enhancing shareholder returns.
- Optimistic Growth Outlook: The company expects net revenue growth of 4% to 6% in 2026, with core earnings-per-share growth of 4% to 6%, and will continue investing in high-growth areas to ensure long-term revenue and earnings growth.
See More
PepsiCo Extends Dividend Growth Streak to 54 Years
- Dividend Increase: PepsiCo has announced a 4% increase in its dividend, marking its 54th consecutive year of dividend growth, which underscores the company's robust cash flow and profitability, solidifying its status as a Dividend King.
- Strong Cash Flow: Last year, PepsiCo generated nearly $12.1 billion in operating cash flow, comfortably covering $4.4 billion in capital expenditures and $7.6 billion in dividend payments, demonstrating its strong financial health and commitment to shareholder returns.
- Future Commitments: By 2026, PepsiCo anticipates paying $7.9 billion in dividends and plans to repurchase $1 billion of its stock as part of a newly announced $10 billion buyback program, reflecting the company's confidence in future growth and commitment to shareholders.
- Growth Strategy: PepsiCo expects to achieve net revenue growth of 4% to 6% by 2026 and plans to invest nearly 5% of its net revenue in high-growth areas to support ongoing growth and profitability, ensuring its ability to maintain future dividend payments.
See More
Coca-Cola and PepsiCo: Attractive Dividend Stocks
- Coca-Cola's Brand Strength: Coca-Cola stands out as a top dividend stock with a 63-year dividend growth streak and strong brand power, reporting a 1% year-over-year increase in unit case volume while adjusted revenue rose by 6% in Q3, showcasing its pricing power and market share gains.
- Stable Dividend Yield: The current quarterly dividend of $0.51, annualized to $2.04, yields 2.60%, and is expected to grow in line with earnings, which analysts project will increase at a 6% annualized rate over the long term, making it a solid income investment.
- PepsiCo's Growth Potential: With 60 consecutive years of dividend payments, PepsiCo benefits from a strong brand portfolio and global distribution network, achieving over 5% revenue growth despite macroeconomic challenges, alongside an 11% increase in adjusted earnings per share.
- Proactive Investment Strategy: PepsiCo plans to pay $5.92 in dividends per share over the next year, with a forward dividend yield of 3.52%, representing 69% of analysts' 2026 earnings estimates, providing an attractive proposition for income investors.
See More
Stable Dividend Growth Investment Opportunities
- American States Water Overview: American States Water (AWR) has paid dividends since 1931 and has raised them annually for 70 years, making it a Dividend King with a current yield of 2.7%, reflecting its strong financial health.
- T. Rowe Price Growth Potential: T. Rowe Price (TROW) manages $1.78 trillion in assets, offering a dividend yield of 5.3%, and has reduced its payout ratio from 71.6% to 55%, enhancing its appeal as a steady growth stock.
- PepsiCo's Risk and Reward: PepsiCo (PEP) paid $7.92 billion in dividends in 2025, with a payout ratio of 105%, yet its revenue grew by 5.6% in Q4, indicating future growth potential despite cash flow pressures from acquisitions.
- Diversifying Dividend Portfolio: By combining the stability of American States Water, the high yield of T. Rowe Price, and the growth potential of PepsiCo, investors can create a diversified dividend portfolio to mitigate risk and enhance returns.
See More
Starbucks and PepsiCo Present Dividend Investment Opportunities
- Starbucks Performance Recovery: After several challenging years, Starbucks is witnessing an uptick in transactions and average ticket size, driving a 4% year-over-year increase in global comparable store sales, indicating early success of its 'Back to Starbucks' plan.
- Dividend Growth Potential: With a quarterly dividend of $0.62 and an annualized dividend of $2.48, Starbucks is nearing its sustainable payout limit; however, under CEO Brian Niccol's turnaround strategy, further increases are anticipated as the business improves.
- PepsiCo's Steady Growth: Over the past five years, PepsiCo has achieved a 31% revenue increase and a 19% rise in free cash flow, with the latest free cash flow reaching $7.6 billion, demonstrating resilience amid high inflation and pandemic challenges.
- Future Dividend Increase: PepsiCo plans to raise its full-year dividend by 4% to $5.92 in 2026, with the current quarterly dividend at $1.4225 and an annualized dividend of $5.69, indicating a strong outlook for continued dividend growth.
See More
